BUS203 Assignment: Consumer Law and Ethical Business Practices

This assignment report delves into the realm of business law and ethics, specifically focusing on consumer protection within the Australian context, referencing the Competition and Consumer Act 2010. The report analyzes a case study involving an online shopper, Erin, and the company Aussale Ltd, examining issues of misleading conduct, deceptive practices, and the breach of consumer guarantees. It explores the legal ramifications of selling defective products and misrepresenting product descriptions, evaluating the responsibilities of suppliers and the rights of consumers under Australian consumer law. The report discusses relevant sections of the Act, such as those concerning misleading conduct, consumer guarantees, and remedies available to consumers, including the right to reject goods and seek compensation. Furthermore, it examines case precedents to illustrate the application of consumer law principles in similar scenarios. The report concludes by summarizing the key legal and ethical considerations, emphasizing the importance of fair trade practices and consumer rights in the Australian market.

Business Law and Ethics

Table of contents
Introduction......................................................................................................................................3
Question...........................................................................................................................................4
Conclusion.......................................................................................................................................7
References........................................................................................................................................9

Introduction
The business organisations in order to operate their business in the market are required to act in a
manner that would contribute in the process of raising their competitive advantage in comparison
to others that are operating. in order to achieve the same the foremost target is to render product
and services that are of high quality and which stands up to the expectation of the customers.
With the promulgation of the customer laws the companies and manufacturers of various
products and services are being restricted from getting engaged in to any form of unfair trade
practices that has the potential of negatively impacting the customer’s position. This particular
assignment focuses on the objective of understanding the provisions relating to Consumer laws
operating in UK along with the protection and remedies that are being extended to the consumers
as defined under the Competition and Consumer Act 2010.

Question
As per the case scenario that has been provided it can be stated that Erin being an online
customer always opts for buying and shopping through various websites that offers their
products and services. One of such company that is Aussale Ltd advertises there latest specials
online and a regular email were being received by Erin. The mail depicted that the company
specialises in selling only Australian products with best deals for their customers. Based on this
claim the Erin bought certain items for her family and friends that includes hair straightener, air
fryer and three T shirts that were defective and not of standard quality.
The consumer law that prevails in Australia that renders uniform legislation in relation to the
objective of consumer protection is the Competition and Consumer Act 2010. This particular
legislation is being considered as the law of the common wealth of Australia and the policies are
required to be followed and applied in almost all the states and territories of the same. In
accordance to the provision of the Competition and Consumer Act 2010 the term Consumer has
been defined under Sec. 3 of Chapter 1 which states that a person can be referred to as a
consumer when the amount paid for acquiring the goods or services prices less than $40,000,
whereas when the amount exceeds more than 40,000 the products and services acquired must be
for any personal or domestic purposes (Pearson, 2017). With the objective of gaining the desired
level of protection and remedy within this Act it necessary to fall within the ambit of the term
customers. The business organisations and companies operating in Australia that are rendering
products and services to the customers are being prohibited under Sec. 18 of the concerned Act
to engage in any form of misleading or deceptive conducts that might jeopardise the position of
the customers (Bant and Paterson, 2017.). All such activities come under the periphery of unfair
trade and practices. In the case of ACCC vs Colgate- Palmolive Pty Ltd [2016] the federal court
was of the view that in order to increase the range and extent of compliance to the trade
regulatory practices it is necessary to increase the intensity of penalties. In the present case the
court was of the view that all the respondents involved in this case were being consciously
breaching the trade regulatory standards in relation to supplying only ultra concentrate detergents
to the Woolworths. In the case of Australian Competition and consumer Commission Vs.
Reckitt Benckiser (Australia) Pty Ltd [2016] the federal court has ordered monetary penalty

against the Reckitt Benckiser to pay almost 1.7 million due to breaching rules and standards in
relation to packaging and displays that can be made through website thereby generating the
conduct of misleading within the Australian Consumer Law. The marketing strategy that was
being implemented by the company was completely misleading in nature (Corones and Clarke,
2015).
Within the provision of the Australian Consumer law the consumers are having the necessary
protection in relation to the services and products that are being served termed as consumer
guarantees. Within Sec. 54 of the CCA 2010 Act the suppliers of products and services are
required to render the desired quality to the customers that are acceptable in nature (Lai and
Becher, 2018). This includes that the suppliers are under a responsibility of providing products
that are free from any kind of defects, acceptable appearance of the products and which are in
compliance to any of the statements that are being made about any such particular commodities
(Stewart, 2015). This makes the supplier of the same to be binding in respect of the
representations that has been made to the customers as this has the potential of influencing the
purchasing decisions of the same. In addition to this under Sec. 55 of the concerned Act deals
with the object of guarantee as to the fitness of products in respect to the purpose of its use has
been discussed (Kariyawasam and Wigley, 2017). This particular Section protects the position of
the customers in relation to the use of any product or services that has been provided expressly or
impliedly to the suppliers before acquiring any such goods. Moreover the responsibilities of the
supplier in regard to rendering services and goods in conformity to the description provided have
been incorporated in the Act within Sec. 56. Not undertaking the same leads to the generation of
the conduct of misleading which is being prohibited and penalised under the consumer laws of
Australia. In the case of Australian Competition and Consumer Commission vs. A Whistle &
Co (1979) the Federal court was of the view that the defendant that is A Whistle & Co has
indulged into unfair trade practices which involves rendering false testimonials on their websites.
This has made the customers rights of receiving standard quality products has been abridged as
they have also encouraged there franchises to engage in to such practices (Cooper, 2018). This
strategy has been undertaken by them in order to ensure that they receive more number of
reviews from the customers thereby getting engaged in to misleading advertisements. In regard
to the case of Australian Competition and Consumer Commission v Bunavit Pty Ltd [2016] it
was being held by the court that the company Bunavit Pty Ltd was being held to have breached

the provision provide under Sec. 18 and Sec. 29(1) (m) of the concerned Act. They were held
liable for getting engaged in activities that are misleading in nature and made false representation
to the customers through their staffs. The provisions that were being included by the Bunavit
while dealing with the customers were totally unreasonable. They were not in conformity to the
consumer guarantee rights that are being provided under the consumer laws. Under Sec. 259 the
customers can claim against suppliers in relation to the goods and services that are being
rendered. The customer guarantee that has been provided under the consumer laws if breached
by the suppliers which results in minor failure then in that case the supplier is required to remedy
the loss within the reasonable amount of time (Fairweather et al., 2016). In case non compliance
has resulted in to an act of major failure on part of the supplier then the consumer is having the
right to reject the goods. In addition to this they are also having the right to gain appropriate
compensation in regard to the reduction in value of the goods in comparison to the price paid.
In the light of the case study of Erin it can be very well seen that the company Aussale Ltd has
advertised themselves through email that they render Australian products. Solely on their
representation the Erin bought items which include a hair straightener for hair straightening and
curling. Erin was being stated by the sales person that it could be used for both purposes but the
same did not worked as stated (Bant, 2016). This depicts that they misrepresented Erin in
relation to the hair straightener otherwise she would not have bought the same. Under Sec. 29 of
the Competition Consumer Act 2010 they should be held liable for the same (Serpell, 2016).
The second item that was being bought by Erin was an air fryer that was being bought from the
website depicts also did not function appropriately (Micklitz et al., 2018). As per the product
specifications and purpose there was defect within the air fryer and was not of the required
product standard. The short circuit from the air fryer resulted in not using the same. In this regard
it can be stated that the company has acted in violation of the rights of consumer under Sec. 54 of
the consumer law as the goods rendered were not of acceptable quality (Howells et al., 2017).
The air fryer delivered was defective in nature which has the possibility of causing major injuries
or harm to the consumers (Pearson, 2018).
The third item that was being bought by Erin was three T shirts which were being advertised by
the company as to be of pure cotton (Bant and Paterson, 2017). The T shirts that were being
delivered by the company were made of Viscose material which depicts that they completely

acted in violation of the description that was being advertised by the company. Hence it can be
stated that the company has engaged in to deceptive practices as the advertised products were not
in conformity to the delivered products thereby acting in Violation of Sec. 18 of the concerned
Act (Lai and Becher, 2018).
Moreover the Aussale Ltd has incorporated in their customer policy of not exchanging or
replacing the items that are being once purchased. This particular provision of makes it
unconscionable in nature as it is breach of the provisions relating to customer guarantee
implemented within the consumer law. Such unreasonable terms and conditions are considered
as void and are being prohibited from exercising the same (Fairweather et al., 2016).
Hence it is very clear that the company is liable for the damages that have been faced by Erin
and the former is liable for activities which involve talking deception, misleading and
misrepresentation (Serpell, 2016). So under Sec. 259 of the concerned of the competition and
consumer Act 2010 Erin have the opportunity of taking appropriate action against the suppliers
of the goods. Within this provision Erin has the opportunity of getting remedied against the
defective product like air dryer by asking for rejecting and replacing the concerned Act. In
addition to this the company should also be held liable to pay pecuniary penalties in regard to the
deceptive activity that are being undertaken by the company by advertising services and products
that are completely different to what has been delivered to the customer. Moreover the terms of
the trade and commerce policies that are being carried out by the company are also violative of
the reasonable terms and conditions of trade and commerce and these were in complete violation
of the guaranteed rights of the customers as well. In addition to this Erin is having the right to
gain compensation in regard to the lowering of product’s value in comparison to the price paid
for the same (Thampapillai et al .,2015 ).
Conclusion
At the end of this assignment it can be very well construed that the consumer law in Australia
takes in to consideration all the probabilities that might result in trade or commerce. Based on the
same the business organisations are required to act with the customers. The provisions that are
being included within the consumer law provide the necessary protection to the customers in
relation to any form of prohibited acts that are being carried by the suppliers of goods and

services. The government has also increased the amount of penalty that is being imposed on the
defaulters with the objective of promoting the interest of customers.

References
1. Bant, E. and Paterson, J.M., 2017. Consumer Redress Legislation: Simplifying or
Subverting the Law of Contract. The Modern Law Review, 80(5), pp.895-926.
2. Bant, E., 2016. Remedies: Reflections and Perspectives. SAcLJ, 28, p.731.
3. Cooper, C., 2018. Remedies for overcharging for repairs. Australian Canegrower, (30 Jul
2018), p.22.
4. Corones, S. and Clarke, P.H., 2015. Australian Consumer Law Commentary and
Materials. Thomson Reuters (Professional).
5. Fairweather, K., O’SHEA, P.A.U.L. and Grantham, R., 2016. Consumer law:
paternalism, fragmentation and centralised enforcement. In Credit, Consumers and the
Law (pp. 27-40). Routledge.
6. Fairweather, K., O’SHEA, P.A.U.L. and Grantham, R., 2016. Consumer law:
paternalism, fragmentation and centralised enforcement. In Credit, Consumers and the
Law (pp. 27-40). Routledge.
7. Howells, G., Twigg-Flesner, C., Micklitz, H.W. and Lei, C. eds., 2017. Comparative
consumer sales law. Routledge.
8. Kariyawasam, K. and Wigley, S., 2017. Online shopping, misleading advertising and
consumer protection. Information & Communications Technology Law, 26(2), pp.73-89.
9. Lai, J.C. and Becher, S.I., 2018. Protecting consumer protection. Victoria U. Wellington
L. Rev., 49, p.259.
10. Micklitz, H.W., Howells, G., Marques, C.L. and Naude, T., 2018. Dissemination of
Consumer Law and Policy in Africa, Asia, the Americas, and Australia. Journal of
Consumer Policy, 41(4), pp.303-307.
11. Pearson, G., 2017. Further challenges for Australian consumer law. In Consumer Law
and Socioeconomic Development (pp. 287-305). Springer, Cham.
12. Pearson, G., 2018. Enforcement and Effectiveness of Consumer Law in Australia.
In Enforcement and Effectiveness of Consumer Law (pp. 75-97). Springer, Cham.
13. Serpell, A., 2016. Financial products and services: Consumer rights and
remedies. Precedent (Sydney, NSW), (134), p.4.
14. Serpell, A., 2016. Financial products and services: Consumer rights and
remedies. Precedent (Sydney, NSW), (134), p.4.
15. Stewart, T., 2015. Unreasonable, unconscionable and oppressive contract terms in South
African and Western Australian Consumer Law (Doctoral dissertation, University of
Johannesburg).
16. Thampapillai, D., Tan, V., Bozzi, C. and Matthew, A., 2015. Australian commercial law.
Cambridge University Press.
Table of cases

ACCC vs Colgate- Palmolive Pty Ltd [2016] (No 4) [2017] FCA 1590
Australian Competition and Consumer Commission v Bunavit Pty Ltd [2016] [2016] FCA 6
Australian Competition and Consumer Commission vs. A Whistle & Co (1979) [2015] FCA
1447
Australian Competition and consumer Commission Vs. Reckitt Benckiser (Australia) Pty Ltd
[2016] [2016] FCAFC 181; 340 ALR 25